Brooklyn project gets Liberty Bonds: first commercial venture to receive funding

Real Estate Weekly, Sept 18, 2002 by Parke Chapman

Forest City Ratner's 10-story office project over Brooklyn's Atlantic Terminal Transit Hub will be the first commercial development to benefit from a $114 million Liberty Bond. The New York City Industrial Development Agency chose the project last week. Liberty Bonds--created in response to the terrorist attacks--provides low cost, tax exempt financing for projects that will "revitalize" lower Manhattan and the city as a whole. Up to $2 billion has been earmarked for commercial projects outside of lower Manhattan. Both the IDA and the New York Liberty Development Corporation are responsible for issuing bonds for commercial projects.

The Bank of New York will occupy 80 percent of the building that will be done by mid-year 2004. Before the terrorist attacks, BONY occupied roughly 2.5 million SF at several locations in lower Manhattan. Two of its buildings--101 Barclay Street and 100 Church Street--sustained serious damage from the attacks, forcing the bank to relocate staff to 23 Wall Street. The bank recently began moving 4,000 employees back into 101 Barclay Street, where their technology and operations center is housed.

Since the attacks, BONY has received some lucrative incentives. In August, the IDA Board approved up to $2 million in sales tax exemptions for BONY to conduct tenant improvements and purchase new equipment and machinery. The bank will also receive a $37.5 million grant through the WTC Job Creation and Retention Program as a reward for keeping over 7,000 jobs in New York City. Approximately 6,160 BONY jobs will remain in lower Manhattan with 1,400 in downtown Brooklyn.

"Forest City Ratner Companies is honored that the state and city of New York have placed their confidence in the future of the Atlantic Terminal Office Building," said Bruce Ratner, president and CEO of Forest City Ratner Companies, via press release. An FCRC did not return a call for comment on the announcement.

"The endorsement of this project by the Liberty Bond selection committee is another welcome sign that downtown Brooklyn remains a preeminent business district," he said.

"Liberty Bonds are yet another example of how the federal, state and city governments are working with the private sector to revitalize and rebuild New York. I am pleased that the Bank of New York has reaffirmed its commitment to New York," said Empire State Development Corporation chairman Charles Gargano.

FCRC's Atlantic Terminal office tower will be built over a five-story, 375,000 SF retail complex.